BENGALURU: Information technology professionals, who claim they were coerced into resigning by employers looking to trim headcount in the midst of an industry slowdown, are flocking to unions in search of support for their demand for compensation.

These retrenched employees — of both local and multinational IT companies — claim their former employers pressured them to hand in resignations instead of firing them, thereby saving on the expense of severance pay.

Last week, a Bengaluru-based technology professional employed by a multinational IT services company received a phone call from the human resource executive asking her to quit voluntarily.

“I was given two days’ time to resign and with no compensation. I have a child and a home loan to pay, I need a severance to keep me going until I find my next job at least,” she said.

“I did not join the company over one phone call, right? Why should I accept resignation over a call?” the employee with a decade of industry experience told ET.

She reached out to Bengaluru-based IT/ITes Employee Centre (ITEC), which describes itself as a “welfare association for IT employees”.

The IT professional is one of nearly half a dozen mid-career professionals with over ten years of experience, interviewed by ET for this story, who claim they were asked to leave without being paid compensation by companies. Technology industry expert Siddharth Pai, however, didn’t think that the companies were being unfair to the employees.

“Companies would not have paid as much as the employees expected. But, contractually they would have met all the obligations. I don't think it is a fair allegation to make,” said Pai, founding partner of 3one4 Capital.

India’s $150-billion outsourcing industry is battling slowdown caused by rising automation in the industry and growing threat of protectionism in its biggest market – the United States.

In the past month, as companies trim workforce during the annual appraisal, a slew of unions representing employees claim they are seeing a sharp hike in distress calls.

“We get so many calls every day about companies forcing employees to resign. We got close to 200 phone calls in the last 3 weeks in our helpline number,” said an ITEC spokesperson. “Publicly companies are denying any retrenchment, but they are forcing people to resign on the other side,” he added.

One employee, who works for a US-based IT services giant, claimed the company he worked for axed several employees during appraisals last month. “In the new appraisal process, the total number of buckets the employees fall under was increased from 3 to 5. This way many are put in the final bucket and are asked to leave without any severance,” the person said.

Union representatives in turn are turning to state governments for help in allaying the concerns of affected employees and to help them receive their due.

Employee Unions like Chennaiheadquartered Forum for IT Employees (FITE) and IT-wing of National Democratic Labour Front (NDLF) say they are seeing more IT employees reaching out to them seeking legal counsel.

“More than 500 people have approached us alleging unfair termination of their job in the last two months. As of now, we raised the issue with the labour commission of Telangana and Hyderabad urging the state to intervene in ‘illegal termination’ of employees,” said Vinodh AJ, general secretary of FITE.

NDLF-IT says it has received about over 100 complaints while ITEC says it is helping employees lodge complaints with the labour department of Bengaluru.

“We already had a meeting with the Additional Labour Commissioner who confirmed that there was no request from any IT companies for official layoffs,” said the ITEC’s spokesperson. “We are now meeting Karnataka IT minister Priyank Kharge and labour minister Santhosh Lad for government intervention in this matter,” he added.

LAW AMBIGUOUSLabour advocate Madhu Damodaran said the law on unionisation in the IT industry in Karnataka is somewhat ambiguous. “Under the trade union act, both the employers and the employees of companies can form a union. And no IT company can be seen exempt,” he said.

“However, as per exemptions provided under the Industrial Establishment Act (standing orders), they can argue that IT employees are not ‘workmen.’

As growth slows, fresh hiring in technology companies has cooled down and companies have started laying off employees. ET recently reported Wipro is letting go of at least 600 employees and Infosys, more than 1,000. IT companies, though, have denied that they are doing anything unusual this year.

ET reached out to half a dozen IT services companies based in Bengaluru and US about the alleged “unfair practices” but most of them refused to comment.

Cognizant, however, pointed out to an earlier comment where it denied layoffs. “Each year, as is the best practice across our industry, we conduct performance review to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process results in changes, including some employees transitioning out of the company.”

According to some estimates, the top four Indian IT services companies may let go 12,000- 15,000 employees in the coming months. Last week, industry body Nasscom reiterated that the industry added close to net 1,70,000 people in the last fiscal and expects to add upwards of 1,50,000 in the current fiscal.

The Indian IT is no stranger to unionisation. After the global financial meltdown in 2008, there were attempts to form unions in the IT industry after there were job cuts, but the industry bounced back a year later and hiring by IT companies resumed on full swing.

Pai is of the view that Indian IT employees have come to expect long-term employment. “When that is not the case, it is typical to find that there is some kind of an attempt by employees to gain their own bargaining power. This is a double-edged sword, which will also change the employee's outlook from a work perspective,” he said.

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